Amazon FBA has become one of the most popular ways to earn income online. In fact, there are over 2 million people selling on Amazon worldwide.

Almost anyone can list an item for sale on Amazon, whether it’s something you’ve purchased wholesale, made yourself or simply a product you no longer want.

If you enroll in the FBA program, you can automate order fulfillment by taking advantage of Amazon’s advanced shipping and fulfillment services and earn more sales from Amazon’s coveted Prime customers.

About half of all sales on Amazon come from third-party sellers.

And out of the top 10,000 sellers, 66% of them use FBA.

What is Amazon FBA?

FBA stands for Fulfillment by Amazon.

What that boils down to is: you sell it, Amazon ships it.

The way it work is:

You send your products to Amazon.

They store them in their warehouses.

When a customer orders one of your products, Amazon picks, packs, ships and tracks the order for you.

They also handle returns and refunds.

All this does come at a price. Amazon charges both storage fees and fulfillment fees.

However, those fees include Amazon’s stellar 24/7 customer service, the cost of shipping goods to customers and access to one of the largest and most advanced fulfillment networks in the world.

Why Amazon FBA Matters: Stats to Know

Amazon has more than 300 million active customers, with 90 million Prime subscribers in the U.S. alone. Brands available specifically to Prime buyers are those that utilize FBA.

And, Prime customers spend more money with Amazon.

The average customer spends $700 per year on Amazon, while Prime customers spend roughly $1,300 per year.

This means that if you use Amazon FBA and are therefore more visible to Prime buyers, you can make more money.

How Amazon FBA Works

Amazon handles all the hard work for you within FBA, so the way it works is pretty simple.

1. Send your products to Amazon.

Amazon has about 100 warehouses across the U.S., some of which are over a million square feet.

You tell them what products you’re sending, and they tell you which warehouses to ship your products to.

2. Amazon sorts and stores your products.

Once Amazon receives your products, they’ll sort and add them to their inventory.

Your products are then stored safely in their warehouses.

On the off chance that anything gets damaged in the warehouse, Amazon will reimburse you.

3. A customer buys your product.

Amazon takes care of the entire transaction for you.

They accept payment and update your inventory automatically.

4. Amazon ships your product.

One of Amazon’s warehouse workers (or robots) grabs your product from storage, packs it into a box and ships it to the customer.

5. Amazon handles customer service – well, a lot of it.

Once the customer receives your product, Amazon follows up to make sure they’re satisfied with the shipment.

They also handle any returns or questions from the customer.

As for any feedback you receive on your product listing, it’s up to you to respond and take action.

6. You get paid.

That’s it! Sound pretty easy? There are a few things you need to do to make sure you’re successful.

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What You Are Responsible For When Using Amazon FBA

Here’s what you’re responsible for:

1. Choosing which products to sell.

You can sell just about anything you like, but if you want to avoid storage fees, make sure you choose products that will sell quickly.

10. Create an in-depth product description.

You want customers to understand exactly what they’re getting and who they’re getting it from when they purchase your product.

11. Answer questions.

One of Amazon’s unique features is the question and answer section.

Anyone can submit a question about a product, whether they’ve purchased it or not, and anyone can submit an answer, whether they’ve purchased the product or not.

Most sellers think they have to wait for customers to ask questions.

But you can increase engagement by getting the ball rolling yourself.

Ask a friend to post a question that’s commonly asked about your product.

Then you post the answer, and customers see that you’re an involved and helpful seller.

12. Get reviews.

If you do nothing else on this list, do this.

It’s been proven time and time again that people are more likely to buy products when they have positive reviews.

When people are unsure about something, they look around to see what other people are doing or saying.

If 100 people say Product A is great, and no one’s saying anything about Product B, guess which one people are going to buy?

13. Choose the right repricing program.

Prices change constantly on Amazon.

And although the lowest price doesn’t always win the buy box, it often does.

Most Amazon sellers use repricing software to automatically change their prices throughout the day.

If you’ve only got a handful of products, you may be able to keep up with repricing manually.

But you’ll see more success if you automate the process.

Many sellers use rule-based repricers, but that often ends up in a race to the bottom, with prices eventually going so low that there’s no profit left. Algorithmic repricers are more advanced, and typically lead to higher profits.

14. Use Amazon Marketing Services (AMS).

You know the “Sponsored products related to this item” section?

Those are ads created through AMS.

This marketing tool allows you to create ads for your products and target them based on keywords or similar products. It also provides performance analytics so you can optimize your ads.

Executive Summary

Amazon’s FBA program allows any business, no matter how small, to get their products in front of millions of customers and take advantage of the largest fulfillment network in the world.

It also allows you to leverage their first-class customer service and storage capabilities.

Plus, customers are more likely to trust your products when they’re backed by Amazon, so it’s a great way to get more sales and increase brand recognition.

Amazon takes a huge load off your plate by handling all this.

And the best part is that FBA integrates seamlessly with BigCommerce.

You can sell on both channels and have Amazon handle fulfillment and inventory management for you.

Although there are a few disadvantages to the FBA program, you can easily minimize them by using the strategies presented here.

Want more insights like this?

We’re on a mission to provide businesses like yours marketing and sales tips, tricks and industry leading knowledge to build the next house-hold name brand. Don’t miss a post. Sign up for our weekly newsletter.

Gennifer Carragher is the Customer Support
Magician at ByteStand, where she lives and
breathes customer service education,
specifically around helping online brands sell
more and better on Amazon, while sipping
coee in her pajamas.